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Brest-Litovsk, Treaty

A treaty initiated by the Soviet government in 1917 in effort to stop the war with Germany. The negotiations lasted several months, during which time Germany continued attacking Russia. The Central Committee sent Trotsky, Kamenev, and Chicherin to end the war. On March 3, 1918, the Treaty of Brest-Litovsk was signed. The terms were harsh for Russia, but were annulled when Germany was defeated by the Allies in November.

Polemical Struggle: The difficult conditions of peace which the Germans, threatening a constantly deeper invasion of the Ukraine and Russia, sought to impose at Brest-Litovsk, created a dispute throughout the Soviet government.

Lenin stood for signing the proposed peace treaty, carrying out the first promise in the slogan the Bolsheviks had used before coming to power: "Peace". Lenin stressed to the Central Committee that Germany could be defeated from within by its workers, and that if the German revolution did not occur and the treaty was not signed, Germany would surely drive further into Russia and force harsher terms of peace. Bukharin opposed the acceptance of the peace terms and advocated a revolutionary war against the Germans [...] Trotsky, seeing the exhaustion of the armed forces, proposed that the war be declared at an end, but that the peace treaty not be signed. If the Germans then continued to advance, Trotsky believed the terms should then be accepted "at the point of a bayonet." This position was meant to show the International and especially the German working class that the Soviets had held out against German imperialism till the very last.

At the outset Lenin's position was in the minority. The principal soviets in Russia – Moscow, Ekaterinburg, Kharkov, Kronstadt, etc. – save for the Petrograd and Sebastopol soviets, were against signing the treaty. On January 21, 1918, at a conference in Petrograd of active leaders throughout the country, with 68 present, the Bukharin's position received a majority of 32, Trotsky's position received 16, and Lenin's position 15 votes.

When the German Army again resumed its advance and gave the treaty as their final ultimatum, the Central Committee hastily enacted Lenin's proposal. At the February 23 meeting, Lenin, Zinoviev, Sverdlov and Sokolnikov voted to sign, with Bukharin, Dzerzhinsky, Uritsky and Lomov voting against.

The C.C. thereupon decided by 7 votes to 4, with 4 abstaining to accept the German proposal instantly. At this session, Stalin commented: "It is not necessary to sign, but we can begin peace negotiations". The Left Communists, and Left SRs, among them Bukharin, Lomov, Bubnov, Yakovlev, Piatakov and V. Smirnov thereupon announced their withdrawal from all responsible party and Soviet posts in order to be able to carry on their agitation against the decision. They issued the paper Kommunist which for several months agitated against the peace. They later rejoined the party, when Germany had been defeated by the Entente powers.

The Bretton Woods Conference of July 1944 set up the World Bank, GATT and the IMF and post-war monetary arrangement by which the US dollar took the place of gold as the medium of international exchange.

Bretton Woods is a quiet New Hampshire town, where, from 1 to 22nd July 1944, Ministers of the U.S., Britain and France met with expert representatives of 41 other Allied countries, including the Soviet Union, in what was officially known as the United Nations Monetary and Financial Conference, to lay the financial and economic basis for the world to follow the expected defeat of Japan and Germany.

Since October 1929, the US dollar had been tied to gold at the rate of $35/oz., and the key decision of the conference was the Dollar Standard – the US$ was to be adopted as the medium for international trade and settlement whilst the US government would be able to print as many dollars as would be required to rebuild Europe and regenerate international trade once protective tariffs were lifted. The British pound (Sterling) was intended to play a mediating role in those regions already tied to Sterling.

The Institutions which were planned at Bretton Woods to oversee this arrangement include the World Bank, launched late in 1945 and officially called the International Bank for Reconstruction and Development (IBRD), intended to provide long-term loans to states for reconstruction after the devastation of the War, the I.M.F. (International Monetary Fund) launched in 1946 and intended to finance short-term imbalances in international payments and help maintain fixed exchange rates, linking all currencies to gold via the Dollar Standard, and in October 1947 the General Agreement on Tariffs and Trade (GATT) to oversee the dismantling of trade barriers.

Background – before the War: the economic Boom, which had followed the period of reconstruction after the First World War, and the defeats inflicted on the workers movement across the world in the mid-1920s, came to an abrupt end with the Wall Street Crash of 24 October 1929, which triggered off the Great Depression. Bankruptcies and skyrocketing unemployment spread from the US to every country in the world, except the USSR, where production continued to expand after the devastation of the Wars of Intervention (1918-1922). The Depression lasted into the late 1930s with 14 million unemployed in the US alone, most with little means of support. The suffering and senseless wastage of human life - dumping of food in the sea, closure of factories as well as millions left to rot in idleness - had turned large numbers of workers to communism; in Europe huge street battles were being fought between million-strong fascist and communist parties. In vain efforts to insulate their own economies from the worldwide economic drought, almost all countries in the world erected trade barriers making export goods to other countries just as impossible as producing for non-existent domestic markets. Even in the U.S., Roosevelt had been elected with widespread popular support for the New Deal – to introduce universal welfare, protect workers' right, the government to take a leading role in the economy and clamp down on business.

To millions of workers queuing at soup kitchens in the West and of labouring for near-starvation wages, the USSR was looking very much like a workers' paradise. As the job market began to pick up with the beginning of recovery in the U.S. and escalating war-spending in Europe, the organised workers' movement began to show real signs of readiness to challenge the institutions which had overseen all this misery. Only the beginning of World War Two and the urgent need to crush Fascism in Germany and Japan postponed a worldwide revolutionary upsurge.

Background – at the end of the War: After the War, the situation facing capitalism was even worse! Apart from the U.S.A., all the Allied governments were bankrupt and carried unpayable debts; all of Europe was devastated and incapable of feeding itself let alone reconstructing. Even worse, in most of the countries occupied by of supporting the Nazis, there was no ruling group which was not about to be strung up from the nearest lamp-post for the activities during the war. The former colonial powers were facing reald and potential uprisings across the globe and had no armies to contain the conflagrations. Add to all this the fact that the European War had been fought mainly between German and the Soviet Union. By July 1944, the Normandy Landing had only just begun, while the Soviet Armies were beginning to occupy Europe from the East, being met with spontaneous workers' uprisings as they went. – the prospects for rebuilding capitalism looked extremely dire!

Background – the U.S.: The US, on the other hand, had remained untouched by the ravages of war and had built a thriving manufacturing industry and grown wealthy selling weapons and lending money to the other combatants. Even though the US had more gold, more manufacturing capacity and more military power than the rest of the world put together, US capitalism could not survive without markets and allies. US power had to be used to rebuild capitalism, especially in Europe, and prevent communist revolution from spreading across the war-ravaged countries of Europe and the colonies whose European masters were no longer able to hold them in bondage. Full employment had been restored in the US and the factories were running hot. All that was required to deliver a little peace and propsperity to the world and prevent a universal uprising was a very, very long line of credit to be extended by the US to the rest of the world.

Thus, the key component of the Bretton Woods Arrangements was the Convertible Dollar – paper gold – which the US government could print as fast as it wanted.

Outcome – The Truman Doctrine:
The Bretton Wood arrangements were largely adhered to and ratified by the participating governments. They did not however prove sufficient to get Europe out of the dolldrums. The Red Army controlled half of Europe, Tito had refused to allow the former pro-Fascist monarchy to be restored by the Allied powers (who made an agreement with Stalin to gain control of Yugoslavia), the Greek Communists were on the verge of winning the Civil War against the Fascist forces supported by Britain and the U.S., while Britain was losing control of of India.

In a speech on 12 March 1947, U.S. President Truman formulated what was to be called “The Truman Doctrine” in terms of the need to provide aid to the governments of Greece and Turkey, but the speech contained the clear implication that Truman was proposing a new global role for the United States. On June 5 1947, US Secretary of State George Marshall announced the Marshall Plan – a huge loan program extended to all the European countries. At first it was intended that the Soviet Union and the Eastern European countries would benefit from the Marshall Plan, but at a Conference in Paris in July 1947, the war-devastated USSR was told they would get no aid and countries like Poland and Czechoslovakia were faced with the choice or lining up with the US to destroy the Soviet Union (whose Army still had a considerable presence on their own soil!) or be excluded from the Plan and from trade with those countries which were to benefit. This more or less marked the beginning of the Cold War (though the term had been coined by US Navy expert George Kennan in late 1946). Marshall Aid was then used systematically to pressure governments and voters in countries like Britain, France and Italy into rejecting Communism in exchange for Aid, while Keynesian Economic policies were used to provide welfare and jobs for the workers.

Outcome – The Collapse of Dollar-Gold Link 1968-1973:
The Bretton Woods arrangements, taken together with the Marshall Plan and the Truman Doctrine, ushered in a period of full employment, relative social peace, universal welfare, better social infrastructure, steady economic growh and gradually increasing prosperity for all those countries which were included in the Plan. Along with this came “controlled” Inflation, steadily rising state debts, stronger and stronger trade unions with better paid, better organised members and high expectations, and an ever-increasing mass of paper dollars circulating in the world economy.

The US Government had to run a huge state deficit, and the first cracks began to appear in the early 1960s when the British got into trouble: the Empire was gone, the government debt was crippling and British industry was antiquated. The role of Sterling as a secondary support from the dollar under the Bretton Woods arrangement soon gave way, transmitting more pressure on to the US. The capacity for continued expansion began to exhaust itself. In the midst of the social crisis which broke out in 1968, French President De Gaulle called the US‘s bluff and asked for the French dollar holdings to be honoured in gold. This was impossible. Even though the US held 3/4 of the world's gold, there was nowhere near enough gold to match the quantity of US dollars circulating in the world economy at US$35/oz.

The Bretton Woods arrangements then collapsed in three stages: (1) In 1968, gold was “frozen” with central banks unable to sell their dollar holdings, but either gold or US$ could be used for transactions between national central banks at the fixed rate; France and Germany broke the Bretton Woods exchange rates and devalued their own currencies against the dollar; (2) In 1971, the US unilaterally devalued the dollar from US$35/oz. to US$38/oz.; (3) In August 1973, facing the threat of an escalating round of competitive devaluations, the Dollar Standard was abandoned and gold floated. Initially the price of gold soared to levels of US$500/oz., but gold was allowed to trickle out of Fort Knox and the panic subsided and the price fell back and gold now floats like any other commodity.

After 1973, one country after another has had to abandon efforts to control the exchange rate of their own currency. The quantity of paper money and other forms of Credit and Fictitious capital circulating on the world's financial markets massively outstrips the quantities available to even the richest government, and the speculators know that they can destroy any government arrogant enough to challenge them to “break the bank”.

The institutions founded at Bretton Woods, particularly GATT and the IMF, continue to play a role in managing the world economy to this day, but no longer is this a world where governments underwrite the security and prosperity of their citizens within a range of stable international agreements – on the contrary!

Brussels "Unity" conference, July 16-18, 1914, called by the Executive
Committee of the International Socialist Bureau (I.S.B.) for an exchange of
opinion on the prospects of reuniting the R.S.D.L.P. The following were
represented: R.S.D.L.P. Central Committee (Bolsheviks); Organising Committee
(Mensheviks); Plekhanov's Unity Group; the Vperyod group; the Bund; the
Social-Democrats of the Latvian Territory; the Social-Democrats of
Lithuania; the Polish Social-Democrats; the Polish Social-Democratic
Opposition; the Polish Socialist Party (The Left wing). The I.S.B. Executive
was represented by Vandervelde, Huysmans, Kautsky, Nemetz and others. Long
before the conference, the I.S.B. leaders made a secret arrangement with the
liquidators on joint action against the Bolsheviks.

Lenin and the Bolsheviks were aware of the real aims pursued by the
organizers of the conference, but deemed it necessary to attend, because a
refusal to do so would not have been understood by the workers of Russia.
The R.S.D.L.P. Central Committee sent its delegation-I.F. Armand (Petrova),
M.F. Vladimirsky (Kamsky), and I.F. Popov (Pavlov). Lenin briefed the
delegated, wrote the report, gave detailed instructions, and provided them
with the necessary material, documents and facts exposing the opportunism of
the Menshevik liquidators and their allies. Lenin was living in Poronin and
directed the delegation from day to day by his advice and instructions.

The R.S.D.L.P. Central Committee report was delivered by Armand. The I.S.B.
leaders would not let her read the full text and she had to summarize only a
part of the report and set out the Bolsheviks' terms for unity, which the
Mensheviks and the leaders of the Second International met with cries and
threats against the Bolsheviks. Kautsky, on behalf of the I.S.B., motioned a
unity resolution, asserting that there was no substantial contradictions
within the Russian Social-Democratic Party which could be an obsticle to
unity. He was supported by Plekhanov and the representatives of the O.C.,
who fiercely attacked Lenin and the C.C. delegation. Rosa Luxemburg also
took an erroneous stand and joined Plekhanov, Vandervelde, Kautsky and the
others who supported the amalgamation of the Bolsheviks and the Mensheviks.
Since the Conference was no empowered to adopt any resolutions-it was to
confine itself to an exchange of opinion-the Bolsheviks and the Latvian
Social-Democrats refused to take part in the voting, but the resolution was
passed by a majority.

The Bolsheviks, led by Lenin, refused to abide by the decisions of the
Brussels Conference and exposed the true aims of the "unifiers" before the
international proletariat. The opportunist leaders of the Second
International failed to eliminate the Bolshevik Party.